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Michael Thöne

25 February 2005
WORKING PAPER SERIES - No. 438
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Abstract
In this paper we review the linkages between the quality of public finances, that is, the level and composition of public expenditure and its financing via revenue and deficits, and economic growth. We review the various channels through which public finances affect growth and its underlying determinants (institutional framework, employment, savings and investment, innovation). The paper addresses the approaches used to assess the performance and efficiency of public spending, and surveys the empirical findings on the impact of fiscal variables on sustained economic growth.
JEL Code
H50 : Public Economics→National Government Expenditures and Related Policies→General
O40 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→General